Publication: Eurasia Daily Monitor Volume: 13 Issue: 186

While a split within the United National Movement (UNM) party threatens to sink the Georgian pro-Western opposition into political chaos, the ruling Georgian Dream–Democratic Georgia (GDDG), which enjoys a constitutional supermajority in the parliament, is readying to swiftly reorient Georgia’s foreign policy priorities. UNM’s leader and former president of Georgia, Mikheil Saakashvili, has launched a new opposition reformist movement in Ukraine (see EDM, November 14, 16). Appearing on the TV channel Rustavi 2, Saakashvili, speaking in Kyiv, effectively called for creating a comparable new political force in Georgia. In addition, he did not mince words in his criticism of the dissenting faction of UNM, de facto led by parliamentarian Giorgi Bokeria (Rustavi 2, November 15). Indeed, the 27 UNM lawmakers who will enter the parliament following last October’s elections will have a difficult time standing up to or breaking through the GDDG’s domination of the national legislature. As such, the opposition’s critical role of questioning and checking the ruling party’s tendency toward centralization of power may be overshadowed by the tumultuous infighting within UNM.

One source of potential concern are the security policy implications of the rapidly growing economic presence of the People’s Republic of China (PRC) in Georgia. The South Caucasus country is now firmly in the orbit of Beijing’s Silk Road Economic Belt and Maritime Silk Road projects. Labeled “One Belt, One Road” (OBOR), these strategic transit mega projects are estimated to cost $3–4 trillion over the next thirty years. China is primarily seeking to utilize the Kars–Tbilisi–Baku railway, to be completed in 2017, as its own transport corridor connecting Central Asia to Europe by rail and ferry, thus sidelining Russia. The PRC also expects to profit significantly from a new deep-water Black Sea port under construction by Anaklia Development Consortium, a joint venture of Georgian TBC Holding and the US-based Conti International (see EDM, February 26). China and Georgia further aim to ratify a new free-trade agreement by the end of year, which would allow both countries “to employ a zero tariff on the large majority of [imported] products” (Civil Georgia, October 6; see EDM, September 21).

Georgia’s exports to China have already grown by 59.1 percent in the first three quarters of 2016. Totaling $138.9 million, they displaced exports to Russia as the second-largest destination for Georgian good, after Turkey. Georgia’s exports to Russia have also experienced an upward trend—increasing by 17 percent (Civil Georgia, October 22). The current $551.6 million trade turnover between China and Georgia can be expected to outgrow Georgia’s total trade with Russia, currently equal to $612.27 million, after the Sino-Georgian free trade agreement begins to operate in 2017. Notably, however, the overall levels of Georgia’s exports and imports have been on a downward trend. They have shrunk by 8 percent and 3 percent, respectively, in part due to the continued troubling fall of the Lari—reaching 2.52 per $1 (Interperssnews.ge, November 11).

The state-owned “Partnership Fund” investment fund, associated with the informal leader of GDDG, Bidzina Ivanishvili, continues regular meetings with Chinese officials, most recently, representing the Silk Road Chamber of International Commerce, to foster exports of Georgian wine and silk (Fund.ge, October 28), as well as Chinese companies investing in Georgia’s tea industry (Eurogeorgia.info, October 20). A first transit cargo train from China, headed to Turkey, arrived in Tbilisi in December 2015 (YouTube, December 15, 2015). Some experts enthusiastically proclaim that this economic “win-win” comes with an additional bonus in the security sphere. Presumably, Russia would not “dare” to “mess” with its “strong partner” China’s “new protégé” Georgia due to Beijing’s interest in Georgian infrastructure, trade and tourism (The Diplomat, April 28).

However, if the next United States presidential administration under Donald Trump follows through on his campaign promise to label China a currency manipulator, this could trigger a trade war. And given Beijing’s increasing tough talk about a “New Cold War” in Asia and beyond (see China Brief, October 4), US-Chinese economic tensions could spill over into other theaters. Namely, in retaliation, China might try to use its newly attained economic weight in Georgia to extract from it concessions in order to thwart US interests in the South Caucasus—in concert rather than in conflict with China’s ally Russia. It seems a fallacy to neglect that what unites the arguably distinct geopolitical interests of both Russia and China in Georgia is their common anti-Western and particularly anti-US stance.

Georgia’s ruling party is largely ignoring the security implications of Beijing’s energetic moves in the country. The Ministry of Foreign Affairs has no document assessing the potential security risks and opportunities associated with this notable trend (Mfa.gov.ge, accessed November 16). Chinese operatives of OBOR in the South Caucasus openly stress they want to install strictly Chinese management of all infrastructure to be used by Chinese companies and assets on the ground (Csis.org, October 11). Moreover, there have already been a handful of cases in which Chinse firms have transferred substandard labor practices to Georgia. A highly publicized incident occurred in the village of Zvare (Kharagauli region): management representatives of Chinese Railroad’s Bureau 23 assaulted several Georgian construction workers, resulting in the arrest of three Chinese citizens (PrimeNewsGeorgia, November 3). And as Washington turns inward over the next year to work through the consequences of the US presidential election, this may open up more opportunities for the PRC to more forcefully attempt to maximize its economic relationship with Georgia. Such deepening economic cooperation, in turn, will likely translate gradually into growing political influence. It is difficult to forecast which political faction in Georgia, if any, will turn out to have an adequate response to this new emerging challenge for the country’s foreign relations.

After failing to deliver on its promise to generate rapid economic growth (see EDM, February 2), the Georgian Dream government appears ready to further embrace the Chinese Tiger. It remains to be seen whether a regrouped pro-Western Georgian opposition will be able to formulate a sound policy that clearly champions Georgia’s integration with Euro-Atlantic institutions, while offering workable remedies for China’s potential growing political involvement.

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